A state lives hand to mouth

Today’s editorial: New York is expected to run out of cash by Dec. 31. What is the Legislature waiting for?

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If the state Legislature needs another reason to close a $3.2 billion mid-year deficit and fast, here’s some urgency: The Paterson administration predicts that by the end of the year, New York will have just $36 million in the bank.

For a $131 billion-a-year government, that’s enough to keep it going for less than 2½ hours. Put another way, sometime in the wee hours of New Year’s Day, the Empire State won’t even have enough loose change for a cab ride home.

And that’s the optimistic view. By state Comptroller Thomas DiNapoli’s reckoning, the numbers are even grimmer than the governor’s budget division predicts. The state, Mr. DiNapoli says, will be $3 million in the red by New Year’s, though the fiscal year doesn’t end until March 31. So about 12 minutes before the ball drops in Times Square, New York will have to ask the bartender if it can run a tab.

Those forecasts, incidentally, are for all the funds the state has. In just the general fund, which relies mainly on taxes, the state will fall between $1.1 and $1.4 billion short by Dec. 31.

Oh, this is all hyperbole, of course. States don’t run out of money, right? There are rainy day funds that haven’t been squeezed dry. There’s always the possibility of borrowing money, if the governor and the Legislature agree.

Never mind that Mr. DiNapoli warns that draining reserves and borrowing just to keep the government running are fiscally irresponsible and only deepen the hole the state is in. Never mind that such measures would undoubtedly hurt the state’s bond rating — making it even more costly to borrow money.

Those legislators who are holding up a solution to the deficit should consider what the state has been doing to get by. The budget division put off $1.5 billion in payments to school districts this month and last. Will the state in December tell school districts — and local governments and all sorts of non-profits that rely on government grants — to make do for another month or two?

New York is sounding less like a well-run state and more like a desperate household, holding off paying bills for as long as it can, living so much paycheck to paycheck that it buys one roll of toilet paper at a time for a dollar at the convenience store when it could pick up a bulk package at a supermarket for perhaps half that — if it only had the cash.

But wait: Word is that Wall Street bonuses may be higher this year and bring in a few million dollars more in taxes. So things might be OK next month after all — if lots of bankers don’t defer their bonuses till next year, if the bonuses aren’t mostly in stock options and if the federal government doesn’t clamp down on the financial sector’s self-largess.

If, in other words, New York gets lucky, it might have enough to party all the way to last call on New Year’s Day.

Surely the Legislature can do better than leave the rest of us wondering if there will be enough to pay the rent.